In reviewing the development of QE in the United States there is a natural comparison to the QE initiated by Japan earlier this decade, starting in March 2001.

However, the US QE initiative is both greater in magnitude than that implemented by the BOJ earlier this decade and, importantly, involves purchases of a variety of assets other than Government bonds, a key distinction from the BOJís QE.

In quantity terms, a comparison of the US QE with that in Japan shows that, during just the first four months (16 weeks), the US monetary base has soared by 97.2% compared to a modest 6.7% at this point in the Japan QE cycle. Indeed, even after the first year the Japanese monetary base had risen only 32.5%.